Saturday, 28 May 2016

It is shocking that Tan Teng Boo missed the big picture


Tan Teng Boo was pessimistic about the economy of Malaysia. He sees the possibility of FBMKLCI dipping below 1,000 points in medium term.

In Capital Dynamics' newsletter dated 29 Jan 2016, he commented "MRT project is near completion with no viable large scale infrastructure projects imminent".

But... didn't he notice the following before the issuance of the newsletter dated 29 Jan 2016,

i) MMC-GAMUDA JV was appointed as the PDP for MRT line 2? (Bursa announcement dated 29 October 2014)
ii) Execution of PDP agreement for MRT line 2? (Bursa announcement dated 13 July 2015)
iii) NST artcile "Advance works for MRT Line 2 ongoing" published on 23 February 2016, just about a week before Tan Teng Boo's article
iv) Article by The Star dated 20 February 2016, saying MRT line 2 would be completed by 2022, published slightly more than a week before Tan Teng Boo's article.

MRT line 2 is expected to cost about RM28b to RM30b, the single largest construction project being implemented in Malaysia.

Besides MRT line 2, another mega project, Pan Borneo Highway was launched in 2015. (source)

On top of that, MRCB-GKENT JV was appointed as the PDP for RM9b LRT line 3 in September 2015. (source)

How could Mr Tan, which based in KL was so ignorant about the development in Malaysia and missed the information which is publicly available?

Separately, he has been complaining the distance between KLIA and KL city centre. To quote him, “Why was Sepang chosen to house the Kuala Lumpur International Airport (KLIA) and not Subang? The KLIA is 80km from Kuala Lumpur. Today the KLIA is the furthest airport from the city centre in the world." (Source)

However, if we "google map", the distance is about 60km. Which is right? Did Mr Tan get his fact right?

Capital Dynamics claims it is an independent fund management and investment advisory house. I wonder how this could be achieved. If he finds a very attractive stock in Bursa Malaysia, but the trading of the stock is not liquid, do you think Capital Dynamics will write about the stock in his newsletter before the funds under his management have accumulated sufficient amount of shares?

Sunday, 22 May 2016

Are you a high networth individual?

Based on Securities Commission Malaysia's guidelines, a high networth individual is defined as:

An individual whose total net personal assets, or total net joint assets with his or her spouse, exceeds RM3 million or its equivalent in foreign currencies, excluding the value of the individual’s primary residence.

An individual who has a gross annual income exceeding RM300,000 or its equivalent in foreign currencies per annum in the preceding 12 months.

An individual who, jointly with his or her spouse, has a gross annual income of RM400,000 or its equivalent in foreign currencies per annum in the preceding 12 months.

Source: https://www.sc.com.my/wp-content/uploads/eng/html/resources/guidelines/salesPractice/19072016_Guidelines%20_Sales_Practices.pdf

Wednesday, 4 May 2016

Notice Of Person Ceasing To Be A Substantial Shareholder

Some blog postings highlighted a high profile investor filed the notice ceasing to be a substantial shareholder in a company very late after he has ceased to be a substantial shareholder.

Not very familiar with companies regulations but based on section 69G of Companies Act 1965,

Section 69G. Person who ceases to be substantial shareholder to notify company.
(1) A person who ceases to be a substantial shareholder in a company shall give notice in writing to the company stating his name and the date on which he ceased to be a substantial shareholder and full particulars of the circumstances by reason of which he ceased to be a substantial shareholder.

(2) The notice shall be given within seven days after the person ceased to be a substantial shareholder.

Form 29C

However, Securities Industries Acts 1983 allow 2 weeks to serve notice on substantial shareholdings and ceasing to be a substantial shareholders

http://www.sc.com.my/wp-content/uploads/eng/html/resources/guidelines/siasireg98.pdf

Sunday, 1 May 2016

Update on SPACs liquidation

CLIQ made an announcement last Friday, providing update on liquidation of the SPAC.

It reasoned why the SPAC is winding up the company pursuant to Section 218(1)(h) of the Companies Act 1965.

To me, the most important point in the announcement was paragraph 5(ii) where it stated:

The Liquidators will be permitted to make payment to and/or to take such necessary steps to meet the requirements as are provided for under Article 61C(7) of the Company’s Articles and to make a substantial interim payment to entitled shareholders.
I would not consider CLIQ as it is possibly involved in a judicial review which may drag the liquidation process. For SONA, it probably offers a return of 9% or more p.a. if a substantial interim payment is made to entitled shareholders, based on previous closing price of 44sen/share.